The U.K.'s Department of Energy and Climate Change (DECC) has introduced a new solar feed-in-tariff (FIT) program that Energy and Climate Change Minister Greg Barker promises will ensure a more ‘predictable, certain and sustainable’ PV industry. The new cuts will go into effect Aug. 1.
The announcement follows an extended legal battle over the government's actions to reduce solar FITs. According to several U.K.-based solar companies, the months of controversy – which centered on the DECC's failure to undergo required consultation procedures before deciding to slash solar FIT levels – have harmed the PV installation market.
This week, the DECC announced that the FIT for a small domestic solar installation will be 16p/kWh, down from 21p, and will be set to decrease on a three-month basis thereafter, with pauses if the market slows down. All tariffs will continue to be index-linked in line with the Retail Price Index (RPI), and the export tariff will be increased from 3.2p to 4.5p.
According to the DECC, the new tariffs should give a return on investment of over 6% for most typical, well-sited installations, and up to 8% for larger projects.
‘We broadly welcome many of the government's decisions for how solar PV will be treated in the FIT scheme and wholeheartedly welcome the inclusion of solar in DECC's updated Renewables Roadmap,’ says Alan Aldridge, chairman of the Solar Trade Association.
‘Despite the currently slow market, the industry can have some confidence that the new tariffs are tight but workable,’ Aldridge adds.
Further details on the new FIT levels are available here.